Toyota Motor ( TM Quick Quote TM - Free Report) recently announced that it has restarted production of its first mass-produced battery electric vehicle (EV), the bZ4X, after it was recalled earlier in the year because of a potential safety risk involving the wheels. Toyota’s initial steps to electrify its fleet came to a halt when the automaker recalled 2,700 bZ4X sports utility crossovers worldwide in June. It was only less than two months after the model was launched that Toyota found itself caught up in a massive safety recall as the vehicle wheels ran the risk of falling off during tight turns due to an issue in the lug bolts. Four months later the company said that it has found a fix for the wheel glitch and intends to resume production to spur its crawling EV progress. Per a filing with Japan’s transport ministry, Toyota has affirmed that it will ensure all hub bolts on the EVs are replaced and properly fastened going forward. It is a relatively easy fix compared to the previous recall but it is a positive development indeed that the company managed to come up with a solution quite fast. Toyota has also admitted that during its addressing of the recall, it discovered another potential issue involving the airbags of the EVs that are designed to prevent head injuries during a crash. The company stated that it fixed the issue before further trouble brewed. Japan-based Subaru also had to recall around 2,600 units of the Solterra, its version of the bZ4X that it co-developed with Toyota. It is likely that the fix applies to the Subaru Solterra model as well, and that its production will also roll off shortly. Both models are built at Toyota's Motomachi assembly plant in Japan. Shipments will be resumed soon, prioritizing customers who have been waiting for their EVs. Toyota has not been able to make a resounding headway in the electrification domain although its peers are focused on their drive toward going electric. Toyota unveiled the bZ4X in October 2021, which became the first vehicle in its new Beyond Zero lineup of EVs, besides being its first mass-market EV. The vehicle was intended to pace up Toyota’s push for EVs, but the recall cast a shadow on its success. The resumption of production is likely to be a glimmer of hope for the company. Last year, the automaker pledged about $30 billion to develop battery EVs and projects the company’s annual sales from electric cars to reach 3.5 million by the end of the decade, about one-third of current annual sales of its gasoline-powered cars. Shares of TM have lost 21.1% over the past year compared with its industry’s 35.6% decline. Image Source: Zacks Investment Research Zacks Rank & Key Picks
TM carries a Zacks Rank #4 (Sell) currently.
Some better-ranked players in the auto space are Lordstown Motors ( RIDE Quick Quote RIDE - Free Report) and Dorman Products ( DORM Quick Quote DORM - Free Report) , each carrying a Zacks Rank #2 (Buy).You can see . the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here Lordstown has an expected earnings growth rate of 66.9% for the current year. The Zacks Consensus Estimate for current-year earnings has remained constant in the past 30 days. Lordstown’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. RIDE pulled off a trailing four-quarter earnings surprise of 29.35%, on average. The stock has declined 65.6% over the past year. Dorman has an expected earnings growth rate of 10.1% for the current year. The Zacks Consensus Estimate for current-year earnings has remained constant in the past 30 days. Dorman’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed one. DORM pulled off a trailing four-quarter earnings surprise of 0.85%, on average. The stock has declined 10.4% over the past year.